What Does a Furnace Installation Cost in 2024?
The cost of a furnace typically ranges from $5,000 to $14,000. This is inclusive of installation costs and any fees. The range accounts for different sizing, power and equipment sophistication.
Cost varies wildly based on region, and also the type, efficiency and power of the furnace you’re purchasing. Unique installation requirements can also increase costs. The range listed above is based on both national averages taken from several sources and regional sales data available to us here at CABS Heating and Air Conditioning.
What Affects Furnace Replacement Cost?
You need a new furnace and want to know what to expect, right? And the large range just above isn’t terribly helpful since it’s a wide range. If you’re purchasing an entry-level furnace in rural Idaho or a top-of-the-line furnace in New York City, your costs can vary more than $10,000.
So how do you narrow it down? That’s what we’re here to help you with.
We help thousands of customers every year and will break down every facet of furnaces so that you know what to look for and ask about when you receive quotes.
The only way to get an exact price is to schedule a visit from a trusted HVAC contractor, but you can get a better sense of ranges and cost factors beforehand to help you make the right decision.
Below, we list factors that affect furnace cost, why you might consider each of them, and we provide more detailed cost ranges near the bottom depending on which type of furnace you decide upon.
Furnace Efficiency
Is your furnace efficient? What does that actually mean? Let’s take a look.
Think about efficiency in terms of percentage. An 80% efficient furnace will convert 80% of its energy to heating your home, while the other 20% will be vented off in another form.
This translates well to cost as well, because it means 80 cents out of every dollar you spend on heating costs is actually going toward heating your home.
So higher efficiency is better, right? Yes, though it’s not the only factor in cost.
Gas furnaces tend to top out around 96% to 98% efficient. No gas furnace is 100% efficient, but the excess runoff of energy is minimal in top-end models.
Electric furnaces are 100% efficient. So are they always better? Not necessarily. This is because the cost of electric and gas energy changes depending on where you live. An 80% efficient gas furnace might save you money on your energy bills compared to electric if the cost of electricity is high where you live. That’s why this is only one factor that affects cost.
All else being equal, though, more efficient is going to save you money long-term, but it will increase the cost of the furnace at installation.
Fuel Types in Furnaces
We touched on fuel types just above, but most modern furnaces use either gas or electricity to power them.
Oil, wood-burning, even corn furnaces still exist, usually in rural regions of the country. But we’ll be focusing on gas and electric.
A lot can determine which of those two will be better for you long-term. These considerations can include:
- Cost of gas or electricity utilities in your area. These vary significantly depending on region or state you live in.
- Availability of gas lines where you live. A separate gas line installation may be needed, or may be impossible.
- Rebates, tax incentives and discounts for one or the other. Some eco-friendly municipalities will have large incentives for electric systems, for example.
Oftentimes, the fuel source you use will be whatever your home is currently set up to use. This is generally the easiest and cheapest, though occasionally switching fuel sources can also be beneficial.
Switching From Electric to Gas Furnace, or Gas to Electric
In order to switch from electric to gas, as mentioned above, you’ll need to make sure you have access to a gas line in your home. Many don’t, and so you’ll need to contact county or city authorities to see about the viability of an installation.
Even if you do have an existing gas line, it may not be operable or producing gas. Calling to confirm this and setting your house up for the transition is the first step. An HVAC contractor can often help with this process.
For the reverse, gas-to-electric, additional electrical work may be necessary to set up the proper connections in your home. This could require a licensed electrician, though again many HVAC companies are equipped to handle these issues as well.
The transition may also require that you consider replacing your entire system, including heat pump or air conditioner. If you are switching the furnace from gas to electric, for example, a hybrid gas/electric system may not be feasible. In these instances, it’s important to ask your HVAC partner about a full system replacement as well.
Fortunately, switching from one to the other often comes with significant benefits. The price of gas may be a lot cheaper where you live. Or there may be tax rebates worth thousands of dollars for switching to electric.
Size and Power of the Furnace
This is a big one, sometimes literally!
If you live in a 1,000 square foot home, your heating and cooling needs aren’t the same as a home that’s 5,000 square feet.
This reflects in the price. The power (also sometimes referred to as tonnage) of your system has to be sufficient to heat and cool your home, but greater power comes with greater cost.
You’ll hear a lot of jargon thrown around by HVAC professionals with power levels. It can be referred to as “sizing” your system. Or they’ll refer to the “tonnage” which is a reference to the output of airflow in a system.
It all points back to the same idea of being able to keep you warm, though. Too much power is actually a bad thing, just as too little is a problem. Making sure you have the proper size and power for your system is critical to enjoying your home in the colder months.
Single-Stage, Two-Stage and Variable Speed Furnaces
This is the other big differentiator in the cost of a furnace. Because not all furnace equipment is created equal.
Single-stage furnaces are those that are either 100% on or entirely off. There’s no in-between. This will still heat your home, and is the basic technology that HVAC has been using for decades.
Two-stage furnaces are those with one additional stage, as the name implies. Depending on the manufacturer and model, this might mean your unit can operate at 60% or 70% or some similar percentage.
The advantage here is that you can still heat your home just as quickly (at 100% capacity), but it allows for better circulation of the air in your home when the unit is running at a lower setting. So it’s a more even heat distribution throughout your home, and for example can help keep your second floor warmer in the coldest months. It also tends to use less energy to heat.
Variable speed furnaces, also sometimes called modulating furnaces, are the advantages of a two-stage furnace but multiplied many times over. Multi-stage furnaces can have numerous stages, and will select the one that best fits your heating needs in the moment.
The result is better comfort in your home and less energy used.
Obviously, as you move up in sophistication, you’ll also be paying more. This may go without saying, but there it is.
HVAC contractors are often quick to tell you that the energy savings from variable speed systems will pay for itself over time. This is only sometimes true!
The more truthful statement is that, yes, variable speed systems are more energy efficient and so your energy bills will be lower. But you may never make up the full difference in initial cost in energy savings alone, unless you’re using the system regularly for more than a decade.
Instead, the greatest benefit is the additional comfort you’ll have in those hard-to-cool rooms and in the coldest months of the year.
Ductwork Modification
What happens if your previous furnace was improperly measured and sized? Or if you added a room to the home since the last system was installed and need a more powerful system?
It means you have inefficiencies in your home and will need additional modifications to the ductwork to make sure you can properly heat your home.
Sometimes this can be a small fix that costs no more than a few hundred dollars. One of the most frequent updates we make to ductwork is to install a new return air drop, which is the largest section of ductwork attached directly to your main unit and helps air to cycle back through your filter and blower fan.
Other times you may need to install new ductwork. This can add to costs significantly. Fortunately, it’s rare that this is needed.
More often, small improvements to the ductwork can mean big benefits for heating. This might mean insulating or sealing leaks in the existing ductwork. The comfort and energy savings from these services can be huge!
In an ideal situation, your ductwork is already perfect for what you need. This is true of most systems we install. Still, it’s worth having this conversation with your HVAC provider to make sure you aren’t throwing away money by upgrading your furnace but ignoring the ductwork.
Installation Add-Ons & Accessories
Have problems with asthma? Does flu season hit your entire family hard? Do you suffer from dry, cracked skin and a persistent cough in the winter?
These are problems that HVAC can assist with. In fact, sometimes it can eliminate them entirely in your home (we can’t vouch for the air anywhere else, unfortunately).
Particular to furnaces and heating, one of the problems many homes have in the winter relates to low humidity.
Low humidity in the colder months can result in the dry, cracked skin mentioned above. It can also put you more at risk for viral or bacterial infections, including colds, flus, even COVID!
The solution is a whole-home humidifier, which can be ducted to your system and made to communicate with your thermostat. This allows you to better control the humidity in your home and avoid excessively dry air in your home.
This can add to the cost of an installation, anywhere from hundreds to thousands of dollars depending on the size of your home. But it’s often cheaper from a labor perspective to have this installed at the same time as a new system instead of scheduling it separately.
Cost of a Furnace
Which brings us to the cost. We gave you a broad range at the top, and the ones below are narrower but still pretty broad. The only way to get an exact price is to speak with a trusted contractor and get a quote.
With that said, what can you expect?
- Single-Stage Furnace Cost: $5,000 – $9,000
- Two-Stage Furnace Cost: $7,000 – $11,000
- Variable Speed Furnace Cost: $9,000 – $14,000
This is inclusive of all labor charges and fees associated with proper permits.
These ranges are also going to be on the low end or high end depending on where you live. For example, here in Sacramento, you won’t see much on the lower end of these spectrums.
Also, if you ever see a cost online that’s a fraction of these, chances are they’re excluding labor costs to make the price seem more attractive. This is a trap. Make sure you’re not falling for it and understand the full cost of these new systems!
The high cost of a new furnace is why financing options are usually available for qualifying homeowners, and why this is considered an upgrade that can even improve the value of your home for resale!
Discounts, Rebates and Tax Incentives for HVAC Equipment
The lists above aren’t the end of the story, though. Often, incentives exist for some equipment that will make them significantly cheaper for you.
The good news is that the best rebates tend to exist for the top-end equipment, which can take the sting off of the initially high price tag.
For example, variable-speed equipment is more eco-friendly, so a lot of states or municipalities will offer rebates for installing this equipment. This can save you thousands of dollars in some areas that heavily incentivize green technology!
We can’t tell you specifics, because the offers will change in many places even depending on the season you’re in. However, make sure you’re asking your HVAC company about this! They’ll be aware of the discounts available through governmental or municipal programs that can help you to afford better equipment.
Choosing the Right Home Furnace
What’s the best furnace for you? We can’t answer that for you, but we hope you have the tools to answer it for yourself by this point.
To help homeowners make their decision, we often ask questions that will help them understand their issues and options:
- Do you struggle to keep any rooms warm currently?
- How long do you plan to live in your current home?
- Do you have issues that could relate to low humidity when heating your home (illness, dry skin, etc.)?
- How important is long-term energy efficiency vs. initial cost?
Answer these questions honestly and you’ll be well on your way to making the best decision for you, your home, and your budget for a new furnace or HVAC system.
This is the part where we come into the equation. CABS Heating and Air Conditioning is a top-rated, trusted provider of HVAC, plumbing and electrical services for people in Sacramento, CA and the surrounding area.
Ready to upgrade your system? We’re excited for you. Give us a call to get started!
